Health Insurance Exam
The sole proprietor of a business makes a total salary of $50,000 a year. This year, his medical expenses have reached a total of $75,000. What amount may the sole proprietor deduct in regards to his medical expenses?
$50,000
A hospital indemnity policy will pay
A benefit for each day the insured is in a hospital
#25. A hospital indemnity policy will pay
A benefit for each day the insured is in a hospital.
What documentation grants express authority to an agent?
Agents contract with the principal
All of the following are characteristics of a Major Medical Expense policy EXCEPT
low maximum limits
in a disability policy, the elimination (or waiting) period refers to the period between
the first day of disability and the day the insured starts receiving benefits.
Which of the following factors would be an underwriting consideration for a small employer carrier?
Percentage of participation
When the policy premium wasn't submitted with the application, what should the agent obtain from the insured upon policy delivery?
A statement of good health
Which of the following disability income policies would have the highest premium?
15-day waiting period / 10-year benefit period
The relation of earnings to insurance provision allows the insurance company to limit the insured's benefits to his/her average income over what period of time?
2 years
An insolvent insurer is one who is unable to pay its obligations when they are due or has fewer assets than liabilities for a period of
3 years
How long must insurers keep records of claims?
3 years
How is emergency care covered for a member of an HIC?
A member of an HIC can receive care in or out of the service area, but care is preferred in the service area.
While a claim is pending, an insurance company may require
An independent examination as often as reasonably required.
Which of the following hospice expenses would NOT be covered in a cost-containment setting?
Antibiotics
By what date in each licensing period are agents required to renew their license?
By the last day of their birth month
If an applicant for a health insurance policy is found to be a substandard risk, the insurance company is most likely to
Charge an extra premium
All of the following are regulated areas of the insurance industry EXCEPT
Commissions
Prior to issuance of a Long-Term Care policy to an applicant age 80 or older, the insurer must obtain all of the following EXCEPT
Date of previous doctor visit.
Which of the following statements about occupational vs. nonoccupational coverage is TRUE?
Disability insurance can be written as occupational or nonoccupational.
Which of the following insurance providers must be nonprofit and sell insurance only to its members?
Fraternal
Which benefits would a disability plan most likely pay?
Income lost by the insured's inability to work
The benefits received by the business in a Disability Buy-Sell policy are
Income tax free.
A person filed a report about an insurance fraud practice. The person could be sued for civil damages by which of the following?
No one
Which of the following is the most common time for errors and omissions to occur on the part of an insurer?
Policy Delivery
A guaranteed renewable health insurance policy allows the
Policyholder to renew the policy to a stated age, with the company having the right to increase premiums on the entire class.
Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information?
The Fair Credit Reporting Act
When is the insurability conditional receipt given?
When the premium is paid at the time of application
How often must the Superintendent examine financial affairs of domestic insurers?
3 years
What is the maximum age for qualifying for a catastrophic plan?
30
To avoid violating the state Insurance Code regarding unfair claims settlement practices, insurers must pay a claim within how many days of the final agreement to the settlement?
5 days
Because an agent is using stationery with the logo of an insurance company, applicants for insurance assume that the agent is authorized to transact on behalf of that insurer. What type of agent authority does this describe?
Apparent
What process will the insurance company use to monitor the insured's hospital stay to make sure that everything is proceeding according to schedule?
Concurrent review
Which of the following provisions requires that any policy language that is in conflict with the state statutes of the state in which the insured resides is automatically amended to conform with those of the state of residence?
Conformity with State Statues
Which of the following is NOT a cost-saving service in a medical plan?
Denial of Coverage
Which of the following best describes an insurance company that has been formed under the laws of this state?
Domestic
Every subscriber of a health insuring corporation is entitled to a/an
Evidence of coverage.
Which of the following entities must approve all Medicare supplement advertisements?
Insurance Commissioner or Director
When a person applies for Medicare supplement insurance, whose responsibility is it to confirm that the applicant does not already have accident or sickness insurance in force?
Insurer
In the event of loss, after a notice of claim is submitted to the insurer, who is responsible for providing claims forms and to which party?
Insurer to the insured
The section of a health policy that states the causes of eligible loss under which an insured is assumed to be disabled is the
Insuring clause
What statement best describes the free look provision?
It allows the insured to return the policy within 10 days for a full refund of premiums if dissatisfied for any reason.
All of the following statements about Medicare Part B are correct EXCEPT
It is a compulsory program.
Which of the following is true regarding a risk retention group?
It is a liability insurance company owned by its members.
Which of the following is true regarding a term health policy?
It is nonrenewable
Which of the following may be used when determining Medicare Advantage out-of-pocket costs?
Medicare Part B premiums paid by the plan
Which type of Medicare policy requires insureds to use specific healthcare providers and hospitals (network providers), EXCEPT in emergency situations?
Medicare SELECT
Which of the following are the main factors taken into account when calculating residual disability benefits?
Present earnings and earnings prior to disability
A Medicare SELECT policy does all of the following EXCEPT
Prohibit payment for regularly covered services if provided by non-network providers
Pertaining to insurance, what is the definition of a fiduciary responsibility?
Promptly forwarding premiums to the insurance company
What would a physician utilize if he/she wanted to know if a treatment is covered under an insured's plan and at what rate it will be paid?
Prospective review
Which type of dental treatment involves the replacement of natural teeth with artificial devices?
Prosthodontics
Installing deadbolt locks on the doors of a home is an example of which method of handling risk?
Reduction
Which of the following is NOT provided by an HIC?
Reimbursement
Which of the following is true regarding health insurance underwriting for a person with HIV?
The person may not be declined for medical coverage solely based on HIV status.
When an employee is still employed upon reaching age 65 and eligible for Medicare, which of the following is the employee's option?
Remain on the group health insurance plan and defer eligibility for Medicare until retirement
In terms of long-term care policies, which of the following are excluded from standard, group policy nonforfeiture benefits?
Retirement communities
The annual contribution limit of a Dependent Care Flexible Spending Account is set by
The IRS.
An insurer wishes to compare the information given in an insurance application with previous insurance applications by the same applicant but for different companies. What organization can help the insurer accomplish this?
The Medical Information Bureau
An HSA holder who is 65 years old decides to use the money in the account for a nonhealth expense. Which of the following is true?
There will be a tax
Which of the following is true regarding METs?
They allow several small employers purchase less expensive insurance together.
Which of the following statements regarding conditional receipts is true?
They are temporary insuring agreements.
Which provision states that the insurance company must pay Medical Expense claims immediately?
Time of Payment of Claims
Which of the following determines whether disability insurance benefits are taxed?
Whether the premiums were tax deductible
An insured has a major medical policy with a $500 deductible and a coinsurance clause of 80/20. If he incurs medical expenses of $4,000, the insurer would pay
$2,800.
An insured has a $1,000 HRA account through his employer. He incurred $750 in medical expenses the first year of the plan. How much, if anything, will the insured be able to roll over toward the next year's expenses?
$250
An insured has a primary group health plan and an excess plan, each covering losses up to $10,000. The insured suffered a loss of $15,000. Disregarding any copayments or deductibles, how much will the excess plan pay?
$5,000
Under the Affordable Care Act, a special enrollment period allows an individual to enroll in a qualified health plan within how many days of a qualifying event?
60 days
According to the PPACA rules, what percentage of health care costs will be covered under a bronze plan?
60%
How many eligible employees must be included in a contributory plan?
75%
The maximum amount than can be contributed to an MSA is what percentage of the family deductible for those with family coverage?
75%
If an applicant intends to replace any existing accident and sickness policy with a Medicare supplement policy, what must the agent furnish to the applicant?
A notice regarding replacement
An insured carries health insurance with two different providers and is covered on an expense incurred basis. He has an appendectomy and files the claims to both insurers. Neither company is notified in advance that the insurer has other coverage. What should each insurer pay?
A proportionate amount
Which of the following long-term care benefits would provide coverage for care for functionally impaired adults on a less than 24-hour basis?
Adult day care
The Omnibus Budget Reconciliation Act of 1990 requires that large group health plans must provide primary coverage for disabled individuals under
Age 65 who are not retired
An insured pays a $100 premium every month for his insurance coverage, yet the insurer promises to pay $10,000 for a covered loss. What characteristic of an insurance contract does this describe?
Aleatory
In reference to the standard Medicare Supplement benefits plans, what does the term standard mean?
All providers will have the same coverage options and conditions for each plan.
Under HIPAA, which of the following is INCORRECT regarding eligibility requirements for conversion to an individual policy?
An individual who was previously covered by group health insurance for 6 months is eligible.
Under a Key Person disability income policy, premium payments
Are made by the business and are not tax-deductible
To comply with Fair Credit Reporting Act, when must a producer notify an applicant that a credit report may be requested?
At the time of application
What document describes an insured's medical history, including diagnoses and treatments?
Attending Physician's Statement
Which of the following is NOT an enrollment period for Medicare Part A applicants?
Automatic enrollment
All of the following are true of the Key Person disability income policy EXCEPT
Benefits are considered taxable income to the business.
How often must a specialty health care insurer provide current company information, providers list, methods of operation and other reports to its insured?
Biennially
After a person's employment is terminated, it is possible to obtain individual health insurance after losing the group health coverage provided by the employer. Which of the following is NOT true?
By law, the new, individual policy must provide the same benefits as the group insurance policy.
Which of the following would NOT be considered an exception to the National Do Not Call List?
Calls based from outside of the United States
An insurance producer who by contract is bound to write insurance for only one company is classified as a/an
Captive Agent
When an insured makes truthful statements on the application for insurance and pays the required premium, it is known as which of the following?
Consideration
Which of the following reports will provide the underwriter with the information about an insurance applicant's credit?
Consumer report
Which of the following provisions must be included on the first page of a Medicare supplement policy, which states the insurer's right to change premium amounts?
Continuation provision
All of the following violations may result in an agent's imprisonment EXCEPT
Failing to report to the department a criminal prosecution taken against the agent in another jurisdiction
Regarding long-term care coverage, as the elimination period gets shorter, the premium
Gets higher.
Which of the following coverages is NOT monitored by the Employee Retirement Income Security Act (ERISA)?
Golden parachutes
As it pertains to group health insurance, COBRA stipulates that
Group coverage must be extended for terminated employees up to a certain period of time at the former employee's expense.
Most LTC plans have which of the following features?
Guaranteed renewability
Which of the following statements is CORRECT concerning the relationship between Medicare and HMOs?
HMOs may pay for services not covered by Medicare.
Which of the following is an eligibility requirement for all Social Security Disability Income benefits?
Have attained fully insured status
Guarantee of insurability option in long-term care policies allows the insured to
Increase benefit levels without providing proof of insurability
in order to minimize adverse selection, employer group dental plans may require employees who enroll after they were initially eligible to participate to do all of the following EXCEPT
Increase benefits for a period of one year.
Issue age policy premiums increase in response to which of the following factors?
Increased benefits
All of the following are differences between individual and group health insurance EXCEPT
Individual insurance does not require medical examinations, while group insurance does require medical examinations.
Which of the following statements concerning Medicare Part B is correct?
It pays for physician services, diagnostic tests, and physical therapy.
Which of the following statements is NOT correct concerning the COBRA Act of 1985?
It requires all employers, regardless of the number or age of employees, to provide extended group health coverage.
Which of the following is NOT true regarding a temporary license in this state?
It will continue for 180 days even if the owner disposes of the business.
When compared with the administrative cost found in individual coverage, the per capita administrative cost in group health insurance is
Lower
All of the following are true regarding the Medical Information Bureau (MIB) EXCEPT
MIB reports are based upon information supplied by doctors and hospitals.
All of the following statements concerning Medicaid are correct EXCEPT
Medicaid is a state funded program that provides health care to persons over age 65, only
What type of benefit helps to pay for accidental injuries that are not severe enough to qualify as disabilities?
Medical Reimbursement Benefit
An insured is involved in a car accident. In addition to general, less serious injuries, he permanently loses the use of his leg and is rendered completely blind. The blindness improves a month later. To what extent will he receive Presumptive Disability benefits?
No benefits
The coverage provided by a disability income policy that does not pay benefits for losses occurring as the result of the insured's employment is called
Nonoccupational coverage.
On a participating insurance policy issued by a mutual insurance company, dividends paid to policyholders are
Not taxable since the IRS treats them as a return of a portion of the premium paid.
In long-term care insurance, what type of care is provided with intermediate care?
Occasional nursing or rehabilitative care
An applicant is discussing his options for Medicare supplement coverage with his agent. The applicant is 65 years old and has just enrolled in Medicare Part A and Part B. What is the insurance company obligated to do?
Offer the supplement policy on a guaranteed issue basis
Under most dental plans, what limitations are posed for denture replacement?
Once every 5 years
Under which of the following organizations are the practicing providers compensated on a fee-for-service basis?
PPO
An insured pays her Major Medical Insurance premium annually on March 1. Last March she forgot to mail her premium to the company. On March 19, she had an accident and broke her leg. The insurance company would
Pay the claim
Which of the following applies to partial disability benefits?
Payment is limited to a certain period of time.
With respect to the Consideration Clause, which of the following would be considered consideration on the part of the applicant for insurance?
Payment of premium
An applicant for health insurance has not had a medical claim in 5 years. He exercises daily and does not smoke or drink. What classification do you assume the applicant would receive from his insurer?
Preferred
Which of the following do the Standard and Preferred risk categories share?
Premiums are not elevated.
Which of the following describes taxation of individual disability income insurance premiums and benefits?
Premiums are not tax deductible, and benefits are not taxable.
All of the following are true regarding key person disability income insurance EXCEPT
Premiums are tax deductible as a business expense.
Health insurance underwriting is best defined as
Selection, classification, and rating of risks.
All of the following refer to specialty health care services EXCEPT
Services that are provided in combination with other health care services
All of the following long-term care coverages would allow an insured to receive care at home EXCEPT
Skilled Care
Which of the following documents contain all information necessary to enable a consumer to make an informed choice as to whether or not to enroll in the health insuring corporation?
Solicitation document
Which of the following is one of the supplemental health care services provided by a health insuring corporation on an outpatient-only basis and not in combination with other supplemental health care services?
Specialty HIC
When an employee covered under a health reimbursement account changes employers, the HRA
Stays with the employer
The transfer of an insured's right to seek damages from a negligent party to the insurer is found in which of the following clauses?
Subrogation
An agent misrepresents the details of an insured's new insurance contract that will be replacing the current contract. Which of the following will most likely happen?
Suspension of license
During the Medicare Advantage open enrollment period, an individual may do all of the following EXCEPT
Switch from an Original Medicare Plan to a Medicare Advantage Plan
When a group disability insurance policy is paid entirely by the employer, benefits paid to disabled employees are
Taxable income to the employee
All of the following coverages are usually included under a dental insurance plan EXCEPT
Teeth whitening
An insured who has an Accidental Death and Dismemberment policy loses her left arm in an accident. What type of benefit will she most likely receive from this policy?
The capital amount in a lump sum
What type of information is NOT included in a certificate of insurance?
The cost the company is paying for monthly premiums
The limits of a health reimbursement account are set by
The employer
Which of the following statements concerning group health insurance is CORRECT?
The employer is the policyholder
If an individual enrolls in a Medicare Advantage Plan on his 65th birthday, when would coverage begin?
The first day of the following month
Which of the following is NOT a feature of a guaranteed renewable provision?
The insurer can increase the policy premium on an individual basis.
Which of the following is NOT a feature of a noncancellable policy?
The insurer may terminate the contract only at renewal for certain conditions.
Regarding the return of premium option for LTC policies, what happens to the premium if the policy lapses?
The insurer will return a percentage of the premiums paid.
Hospital indemnity/hospital confinement indemnity policy will provide payment based on
The number of days confined in a hospital.
All of the following are examples of risk retention EXCEPT
premiums